Dodd–Frank Wall Street Reform and Consumer Protection Act

An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.

The law was initially proposed by the Obama administration in June 2009, when the White House sent several proposed bills to Congress. The legislation was introduced in the House in July 2009. On December 2, 2009, revised versions of the bill were introduced in the House of Representatives by then–financial services committee chairman Barney Frank, and in the Senate Banking Committee by former chairman Chris Dodd. Dodd and Frank were both involved with the bill; the conference committee that reported on June 25, 2010,[1] voted to name the bill after both men.[8]

Studies have found the Dodd–Frank Act has improved financial stability and consumer protection,[9] although there has been debate regarding its economic effects.[10][11] The Act established the Consumer Financial Protection Bureau (CFPB), which from inception to April 2017 had "returned almost $12 billion to 29 million consumers and imposed about $600 million in civil penalties."[12]

On June 8, 2017, the Republican-led House passed the Financial CHOICE Act, which, if enacted, would roll back many of the provisions of Dodd–Frank. In June 2017 the Senate was crafting its own reform bill.[13][14]

On March 14, 2018, the Senate passed a bill by a 67 to 31 vote, easing financial regulations and reducing oversight for banks with assets below $250 billion.[15][16][17] The law passed the House of Representatives on May 22, 2018 in a 258–159 vote.[18] The legislation was then signed into law by President Donald Trump on May 24, 2018.[19]

The financial crisis of 2007–10 led to widespread calls for changes in the regulatory system.[21] In June 2009, President Obama introduced a proposal for a "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression".[22]

As the finalized bill emerged from conference, President Obama said that it included 90 percent of the reforms he had proposed.[23] Major components of Obama's original proposal, listed by the order in which they appear in the "A New Foundation" outline,[22] include

The consolidation of regulatory agencies, elimination of the national thrift charter, and new oversight council to evaluate systemic risk

Consumer protection reforms including a new consumer protection agency and uniform standards for "plain vanilla" products as well as strengthened investor protection

Tools for financial crisis, including a "resolution regime" complementing the existing Federal Deposit Insurance Corporation (FDIC) authority to allow for orderly winding down of bankrupt firms, and including a proposal that the Federal Reserve (the "Fed") receive authorization from the Treasury for extensions of credit in "unusual or exigent circumstances"

Various measures aimed at increasing international standards and cooperation including proposals related to improved accounting and tightened regulation of credit rating agencies

At President Obama's request, Congress later added the Volcker Rule to this proposal in January 2010.[24]

The bills that came after Obama's proposal were largely consistent with the proposal, but contained some additional provisions and differences in implementation.[25]

The Volcker Rule was not included in Obama's initial June 2009 proposal, but Obama proposed the rule[24] later in January 2010, after the House bill had passed. The rule, which prohibits depository banks from proprietary trading (similar to the prohibition of combined investment and commercial banking in the Glass–Steagall Act[26]), was passed only in the Senate bill,[25] and the conference committee enacted the rule in a weakened form, Section 619 of the bill, that allowed banks to invest up to 3 percent of their tier 1 capital in private equity and hedge funds[27] as well as trade for hedging purposes.

The initial version of the bill passed the House largely along party lines in December by a vote of 223 to 202,[1] and passed the Senate with amendments in May 2010 with a vote of 59 to 39[1] again largely along party lines.[1] The bill then moved to conference committee, where the Senate bill was used as the base text[28] although a few House provisions were included in the bill's base text.[29]

One provision on which the White House did not take a position[30] and remained in the final bill[30] allows the SEC to rule on "proxy access"—meaning that qualifying shareholders, including groups, can modify the corporate proxy statement sent to shareholders to include their own director nominees, with the rules set by the SEC. This rule was unsuccessfully challenged in conference committee by Chris Dodd, who—under pressure from the White House[31]—submitted an amendment limiting that access and ability to nominate directors only to single shareholders who have over 5 percent of the company and have held the stock for at least two years.[30]

The "Durbin amendment"[32] is a provision in the final bill aimed at reducing debit card interchange fees for merchants and increasing competition in payment processing. The provision was not in the House bill;[25] it began as an amendment to the Senate bill from Dick Durbin[33] and led to lobbying against it.[34]

The New York Times published a comparison of the two bills prior to their reconciliation.[35] On June 25, 2010, conferees finished reconciling the House and Senate versions of the bills and four days later filed a conference report.[1][36] The conference committee changed the name of the Act from the "Restoring American Financial Stability Act of 2010". The House passed the conference report, 237–192 on June 30, 2010.[37] On July 15, the Senate passed the Act, 60–39.[38][39] President Obama signed the bill into law on July 21, 2010.[40]

To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail," to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.[45]

The Act changes the existing regulatory structure, by creating a number of new agencies (while merging and removing others) in an effort to streamline the regulatory process, increasing oversight of specific institutions regarded as a systemic risk, amending the Federal Reserve Act, promoting transparency, and additional changes. The Act's intentions are to provide rigorous standards and supervision to protect the economy and American consumers, investors and businesses; end taxpayer-funded bailouts of financial institutions; provide for an advanced warning system on the stability of the economy; create new rules on executive compensation and corporate governance; and eliminate certain loopholes that led to the 2008 economic recession.[46] The new agencies are either granted explicit power over a particular aspect of financial regulation, or that power is transferred from an existing agency. All of the new agencies, and some existing ones that are not currently required to do so, are also compelled to report to Congress on an annual (or biannual) basis, to present the results of current plans and explain future goals. Important new agencies created include the Financial Stability Oversight Council, the Office of Financial Research, and the Bureau of Consumer Financial Protection.

As a practical matter, prior to the passage of Dodd–Frank, investment advisers were not required to register with the SEC if the investment adviser had fewer than 15 clients during the previous 12 months and did not hold himself out generally to the public as an investment adviser. The act eliminates that exemption, rendering numerous additional investment advisers, hedge funds, and private equity firms subject to new registration requirements.[47]

To the extent that the Act affects all federal financial regulatory agencies, eliminating one (the Office of Thrift Supervision) and creating two (Financial Stability Oversight Council and the Office of Financial Research) in addition to several consumer protection agencies, including the Bureau of Consumer Financial Protection, this legislation in many ways represents a change in the way America's financial markets will operate in the future. Few provisions of the Act became effective when the bill was signed.[50]

Title I, or the "Financial Stability Act of 2010,"[51] outlines two new agencies tasked to monitor systemic risk and research the state of the economy and clarifies the comprehensive supervision of bank holding companies by the Federal Reserve.

Title I creates the Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR) in the U.S. Treasury Department. These two agencies are designed to work closely together. The council is formed of 10 voting members, 9 of whom are federal regulators and 5 nonvoting supporting members, to encourage interagency collaboration and knowledge transfer.[52] The treasury secretary is chairman of the council, and the head of the Financial Research Office is appointed by the president with confirmation from the Senate.

Under section 165d, certain institutions must prepare resolution plans (so-called living wills), the first round of which was rejected by the Federal Reserve System in 2014.[54]
The process can be seen as a way to regulate and reduce shadow banking activities by banking institutions.[55]

The Financial Stability Oversight Council is tasked to identify threats to the financial stability of the United States, promote market discipline, and respond to emerging risks in order to stabilize the United States financial system. At a minimum, it must meet quarterly.

The Council is required to report to Congress on the state of the financial system and may direct the Office of Financial Research to conduct research.[56] Notable powers include

With a two-thirds vote, it may place nonbank financial companies or domestic subsidiaries of international banks under the supervision of the Federal Reserve if it appears that these companies could pose a threat to the financial stability of the United States.[57]

Under certain circumstances, the council may provide for more stringent regulation of a financial activity by issuing recommendations to the primary financial regulatory agency, which the primary financial agency is obliged to implement—the council reports to Congress on the implementation or failure to implement such recommendations.[58]

The council may require any bank or nonbank financial institution with assets over $50 billion to submit certified financial reports.[59]

With the approval of the council, the Federal Reserve may promulgate safe harbor regulations to exempt certain types of foreign banks from regulation.[60]

The Office of Financial Research is designed to support the Financial Stability Oversight Council through data collection and research. The director has subpoena power and may require from any financial institution (bank or nonbank) any data needed to carry out the functions of the office.[61] The Office can also issue guidelines to standardizing the way data is reported; constituent agencies have three years to implement data standardization guidelines.[62]

It is intended to be self-funded through the Financial Research Fund within two years of enactment, with the Federal Reserve providing funding in the initial interim period.[63]

In many ways, the Office of Financial Research is to be operated without the constraints of the Civil Service system. For example, it does not need to follow federal pay-scale guidelines (see above), and it is mandated that the office have workforce development plans[64] that are designed to ensure that it can attract and retain technical talent, which it is required to report about congressional committees for its first five years.[65]

The New York City headquarters of Lehman Brothers at the time of its collapse in 2008.

Before Dodd–Frank, federal laws to handle the liquidation and receivership of federally regulated banks existed for supervised banks, insured depository institutions, and securities companies by the FDIC or Securities Investor Protection Corporation (SIPC). Dodd–Frank expanded these laws to potentially handle insurance companies and nonbank financial companies and changed these liquidation laws in certain ways.[66] Once it is determined that a financial company satisfied the criteria for liquidation, if the financial company's board of directors does not agree, provisions are made for judicial appeal.[67] Depending on the type of financial institution, different regulatory organizations may jointly or independently, by two-thirds vote, determine whether a receiver should be appointed for a financial company:[68]

Provided that the secretary of treasury, in consultation with the president, may also determine to appoint a receiver for a financial company.[69] Also, the Government Accountability Office (GAO) shall review and report to Congress about the secretary's decision.[70]

When a financial institution is placed into receivership under these provisions, within 24 hours, the secretary shall report to Congress. Also, within 60 days, there shall be a report to the general public.[71] The report on recommending to place a financial company into receivership shall contain various details on the state of the company, the impact of its default on the company, and the proposed action.[72]

The FDIC is the liquidator for most such financial institutions as failed banks.

Unless otherwise stated, the FDIC is the liquidator for financial institutions who are not banking members (such as the SIPC) nor insurance companies (such as the FDIC). In taking action under this title, the FDIC shall comply with various requirements:[73]

Determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company

Ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Funds are fully paid

Ensure that unsecured creditors bear losses in accordance with the priority of claim provisions

Ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the corporation is appointed receiver)

Ensure that the members of the board of directors (or body performing similar functions) responsible for the failed condition of the covered financial company are removed, if such members have not already been removed at the time the corporation is appointed as receiver

Not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary

To the extent that the Act expanded the scope of financial firms that may be liquidated by the federal government, beyond the existing authorities of the FDIC and SIPC, there had to be an additional source of funds, independent of the FDIC's Deposit Insurance Fund, used in case of a non-bank or non-security financial company's liquidation. The Orderly Liquidation Fund is to be an FDIC-managed fund, to be used by the FDIC in the event of a covered financial company's liquidation[74] that is not covered by FDIC or SIPC.[75]

Initially, the fund is to be capitalized over a period no shorter than five years, but no longer than 10; however, in the event the FDIC must make use of the fund before it is fully capitalized, the secretary of the treasury and the FDIC are permitted to extend the period as determined necessary.[45] The method of capitalization is by collecting risk-based assessment fees on any "eligible financial company"—which is defined as ". . . any bank holding company with total consolidated assets equal to or greater than $50 billion and any nonbank financial company supervised by the Board of Governors." The severity of the assessment fees can be adjusted on an as-needed basis (depending on economic conditions and other similar factors), and the relative size and value of a firm is to play a role in determining the fees to be assessed.[45] The eligibility of a financial company to be subject to the fees is periodically reevaluated; or, in other words, a company that does not qualify for fees in the present will be subject to the fees in the future if it crosses the 50 billion line, or become subject to Federal Reserve scrutiny.[45]

To the extent that a covered financial company has a negative net worth and its liquidation creates an obligation to the FDIC as its liquidator, the FDIC shall charge one or more risk-based assessment such that the obligation will be paid off within 60 months of the issuance of the obligation.[76] The assessments will be charged to any bank holding company with consolidated assets greater than $50 billion and any nonbank financial company supervised by the Federal Reserve. Under certain conditions, the assessment may be extended to regulated banks and other financial institutions.[77]

Assessments will be implemented according to a matrix that the Financial Stability Oversight Council recommends to the FDIC. The matrix shall take into account[78]

An insurance company, assessed pursuant to applicable state law to cover costs of rehabilitation or liquidation

Strength of its balance sheet, both on-balance sheet and off-balance sheet assets, and its leverage

Relevant market share

Potential exposure to sudden calls on liquidity precipitated by economic distress with other financial companies

The amount, maturity, volatility, and stability of the liabilities of the company, including the degree of reliance on short-term funding, taking into consideration existing systems for measuring a company's risk-based capital

The stability and variety of the company's sources of funding

The company's importance as a source of credit for households, businesses, and state and local governments and as a source of liquidity for the financial system

The extent to which assets are simply managed and not owned by the financial company and the extent to which ownership of assets under management is diffuse

The amount, different categories, and concentrations of liabilities, both insured and uninsured, contingent and noncontingent, including both on-balance sheet and off-balance sheet liabilities, of the financial company and its affiliates

When liquidating a financial company under this title (as opposed to FDIC or SIPD) there is a maximum limit of the government's liquidation obligation, i.e., the government's obligation can not exceed[79]

10 percent of the total consolidated assets, or

90 percent of the fair value of the total consolidated assets

In the event that the Fund and other sources of capital are insufficient, the FDIC is authorized to buy and sell securities on behalf of the company (or companies) in receivership to raise additional capital.[45] Taxpayers shall bear no losses from liquidating any financial company under this title, and any losses shall be the responsibility of the financial sector, recovered through assessments:[80]

Liquidation is required for all financial companies put into receivership under this title

All funds expended in the liquidation of a financial company under this title shall be recovered from the disposition of assets or assessments on the financial sector

Established inside the U.S. Bankruptcy Court for the District of Delaware, the panel is tasked with evaluating the conclusion of the secretary of treasury that a company is in (or in danger of) default. The panel consists of three bankruptcy judges drawn from the District of Delaware, all of whom are appointed by the chief judge of the United States Bankruptcy Court for the District of Delaware. In his appointments, the chief judge is instructed to weigh the financial expertise of the candidates.[45] If the panel concurs with the secretary, the company in question is permitted to be placed into receivership; if it does not concur, the secretary has an opportunity to amend and refile his or her petition.[45] In the event that a panel decision is appealed, the United States Court of Appeals for the Third Circuit has jurisdiction; in the event of further appeal, a writ of certiorari may be filed with the U.S. Supreme Court. In all appellate events, the scope of review is limited to whether the decision of the secretary that a company is in (or in danger of) default is supported by substantial evidence.[45]

Title III—Transfer of Powers to the Comptroller, the FDIC, and the Fed[edit]

Title III, or the "Enhancing Financial Institution Safety and Soundness Act of 2010,"[81] is designed to streamline banking regulation. It also is intended to reduce competition and overlaps between different regulators by abolishing the Office of Thrift Supervision and transferring its power over the appropriate holding companies to the board of governors of the Federal Reserve System, state savings associations to the FDIC, and other thrifts to the office of the Comptroller of the Currency.[82] The thrift charter is to remain, although weakened. Additional changes include:

Each of the financial regulatory agencies represented on the Council shall establish an Office of Minority and Women Inclusion that shall be responsible for all matters of the agency in relation to diversity in management, employment, and business activities.[85]

Title IV, or the "Private Fund Investment Advisers Registration Act of 2010,"[86] requires certain previously exempt investment advisers to register as investment advisers under the Investment Advisers Act of 1940.[87] Most notably, it requires many hedge fund managers and private equity fund managers to register as advisers for the first time.[88] Also, the act increases the reporting requirements of investment advisers as well as limiting these advisers' ability to exclude information in reporting to many of the federal government agencies.

Subtitle A, also called the "Federal Insurance Office Act of 2010",[89] establishes the Federal Insurance Office within the Treasury Department, which is tasked with:[90]

Monitoring all aspects of the insurance industry (except health insurance, some long-term care insurance, and crop insurance), including the identification of gaps in regulation of insurers that could contribute to financial crisis[91]

Monitoring the extent to which traditionally under-served communities and consumers, minorities, and low-and moderate-income persons have access to affordable insurance (except health insurance)

Making recommendations to the Financial Stability Oversight Council about insurers that may pose a risk, and to help any state regulators with national issues

Administering the Terrorism Insurance Program

Coordinating international insurance matters

Determining whether state insurance measure are preempted by covered agreements (states may have more stringent requirements)

Consulting with the states (including state insurance regulators) regarding insurance matters of national importance and prudential insurance matters of international importance;

The office is headed by a director appointed for a career-reserved term by the secretary of the treasury.[92]

Generally, the Insurance Office may require any insurer company to submit such data as may be reasonably required in carrying out the functions of the office.[93]

A state insurance measure shall be preempted if, and only to the extent that, the director determines that the measure results in a less favorable treatment of a non–U.S. insurer whose parent corporation is located in a nation with an agreement or treaty with the United States.[94]

Subtitle B, also called the "Nonadmitted and Reinsurance Reform Act of 2010"[95] applies to nonadmitted insurance and reinsurance. Regarding to nonadmitted insurance, the Act provides that the placement of nonadmitted insurance will be subject only to the statutory and regulatory requirements of the insured's home state and that no state, other than the insured's home state, may require a surplus lines broker to be licensed to sell, solicit, or negotiate nonadmitted insurance respecting the insured.[96] The Act also provides that no state, other than the insured's home state, may require any premium tax payment for nonadmitted insurance.[97] However, states may enter into a compact or otherwise establish procedures to allocate among the states the premium taxes paid to an insured's home state.[98] A state may not collect any fees in relation to the licensing of an individual or entity as a surplus lines broker in the state unless that state has in effect by July 21, 2012, laws or regulations providing for participation by the state in the NAIC's national insurance producer database, or any other equivalent uniform national database, for the licensure of surplus lines brokers and the renewal of these licenses.[99]

Title VI, or the "Bank and Savings Association Holding Company and Depository Institution Regulatory Improvements Act of 2010,"[100] introduces the so-called Volcker Rule after former chairman of the Federal ReservePaul Volcker by amending the Bank Holding Company Act of 1956. With aiming to reduce the amount of speculative investments on the balance sheets of large firms, it limits banking entities to owning no more than 3 percent in a hedge fund or private equity fund of the total ownership interest.[101] All of the banking entity's interests in hedge funds or private equity funds cannot exceed 3 percent of the banking entity's Tier 1 capital. Furthermore, no bank with a direct or indirect relationship with a hedge fund or private equity fund "may enter into a transaction with the fund, or with any other hedge fund or private equity fund that is controlled by such fund" without disclosing the relationship's full extent to the regulating entity, and ensuring that there is no conflict of interest.[102] "Banking entity" includes an insured depository institution, any company controlling an insured depository institution, and such a company's affiliates and subsidiaries. Also, it must comply with the Act within two years of its passing, although it may apply for time extensions. Responding to the Volcker Rule and anticipating of its ultimate impact, several commercial banks and investment banks operating as bank holding companies have already begun downsizing or disposing their proprietary trading desks.[103]

The rule distinguishes transactions by banking entities from transactions by nonbank financial companies supervised by the Federal Reserve Board.[104] The rule states that generally "an insured depository institution may not purchase an asset from, or sell an asset to, an executive officer, director, or principal shareholder of the insured depository institution, or any related interest of such person . . . unless the transaction is on market terms; and if the transaction represents more than 10 percent of the capital stock and surplus of the insured depository institution, the transaction has been approved in advance by a majority of the members of the board of directors of the insured depository institution who do not have an interest in the transaction."[105] Providing for the regulation of capital, the Volcker Rule says that regulators are required to impose upon institutions capital requirements that are "countercyclical, so that the amount of capital required to be maintained by a company increases in times of economic expansion and decreases in times of economic contraction," to ensure the safety and soundness of the organization.[106][107] The rule also provides that an insured state bank may engage in a derivative transaction only if the law with respect to lending limits of the state in which the insured state bank is chartered takes into consideration credit exposure to derivative transactions.[108] The title provides for a three-year moratorium on approving FDIC deposit insurance received after November 23, 2009, for an industrial bank, a credit card bank, or a trust bank either directly or indirectly owned or controlled by a commercial firm.[109]

In accordance with section 1075 of the law, payment card networks must allow merchants to establish a minimum dollar amount for customers using payment cards, as long as the minimum is no higher than $10.[110]

The Volcker Rule was first publicly endorsed by President Obama on January 21, 2010.[111][112] The final version of the Act prepared by the conference committee included a strengthened Volcker rule by containing language by Senators Jeff Merkley (D-Oregon) and Carl Levin (D-Michigan), covering a greater range of proprietary trading than originally proposed by the administration, except notably for trading in U.S. government securities and bonds issued by government-backed entities. The rule also bans conflict-of-interest trading.[106][113] The rule seeks to ensure that banking organizations are both well capitalized and well managed.[114] The proposed draft form of the Volcker Rule was presented by regulators for public comment on October 11, 2011, with the rule due to go into effect on July 21, 2012.[115]

The title provides that "except as provided otherwise, no Federal assistance may be provided to any swaps entity with respect to any swap, security-based swap, or other activity of the swaps entity."[122] An "Interagency Group" is constituted to handle the oversight of existing and prospective carbon markets to ensure an efficient, secure, and transparent carbon market, including oversight of spot markets and derivative markets.[123]

Title VIII, called the Payment, Clearing, and Settlement Supervision Act of 2010,[124] aims to mitigate systemic risk within and promote stability in the financial system by tasking the Federal Reserve to create uniform standards for the management of risks by systemically important financial organizations and institutions by providing the Fed with an "enhanced role in the supervision of risk management standards for systemically important financial market utilities; strengthening the liquidity of systemically important financial market utilities; and providing the Board of Governors an enhanced role in the supervision of risk management standards for systemically important payment, clearing, and settlement activities by financial institutions."[125]

Title IX—Investor Protections and Improvements to the Regulation of Securities[edit]

Title IX, sections 901 to 991, known as the Investor Protections and Improvements to the Regulation of Securities,[126] revises the Securities and Exchange Commission's powers and structure, as well as credit rating organizations and the relationships between customers and broker-dealers or investment advisers. This title calls for various studies and reports from the SEC and Government Accountability Office (GAO). This title contains 10 subtitles, lettered A through J.

To prevent regulatory capture within the SEC and increase the influence of investors, the Act creates an Office of the Investor Advocate,[127] an investor advisory committee composed of 12 to 22 members who serve four-year terms,[128] and an ombudsman appointed by the Office of the Investor Advocate.[129] The investor advisory committee was actually created in 2009 and, therefore, it predates the Act's passage. However, it is specifically authorized under the Act.[119]

SEC is specifically authorized to issue "point-of-sale disclosure" rules when retail investors purchase investment products or services; these disclosures include concise information on costs, risks, and conflicts of interest.[119]:160–1 This authorization follows up the SEC's failure to implement proposed point-of-sale disclosure rules between 2004 and 2005.[130] These proposed rules generated opposition because they were perceived as burdensome to broker–dealers. For example, they would require oral disclosures for telephone transactions; they were not satisfied by cheap internet or email disclosures, and they could allow the customer to request disclosures specific to the amount of their investment. To determine the disclosure rules, the Act authorizes the SEC to perform "investor testing" and to rely on experts to study financial literacy among retail investors.[131]

Subtitle A provides authority for the SEC to impose regulations requiring "fiduciary duty" by broker–dealers to their customers.[119]:158 Although the Act does not create such a duty immediately, it does authorize the SEC to establish a standard. It also requires the SEC to study the standards of care that broker–dealers and investment advisers apply to their customers and to report to Congress on the results within six months.[119] Under the law, commission and limited product range would not violate the duty and broker–dealers would not have a continuing duty after receiving the investment advice.[132]

Subtitle B gives the SEC further powers of enforcement, including a "whistleblower bounty program"[133], which is partially based upon the successful qui tam provisions of the 1986 Amendments to the False Claims Act as well as an IRS whistleblower reward program Congress created in 2006. The SEC program rewards individuals providing information resulting in an SEC enforcement action in which more than $1 million in sanctions is ordered.[77] Whistleblower rewards range from 10 to 30 percent of the recovery. The law also provides job protections for SEC whistleblowers and promises confidentiality for them.[134]

Section 921I controversially limited FOIA's applicability to the SEC,[135] a change partially repealed a few months later.[136] The SEC had previously used a narrower existing exemption for trade secrets when refusing Freedom of Information Requests.[137]

Subtitle C—Improvements to the Regulation of Credit Rating Agencies[edit]

Recognizing credit ratings that credit rating agencies had issued, including nationally recognized statistical rating organizations (NRSROs), are matters of national public interest, that credit rating agencies are critical "gatekeepers" in the debt market central to capital formation, investor confidence, and the efficient performance of the United States economy, Congress expanded regulation of credit rating agencies.[138]

Subtitle C cites findings of conflicts of interest and inaccuracies during the recent financial crisis contributed significantly to the mismanagement of risks by financial institutions and investors, which in turn adversely impacted the US economy as factors necessitating increased accountability and transparency by credit rating agencies.[139]

Subtitle C mandates the creation by the SEC of an Office of Credit Ratings (OCR) to provide oversight over NRSROs and enhanced regulation of such entities.[140]

Establish, maintain, enforce, and document an effective internal control structure governing the implementation of and adherence to policies, procedures, and methodologies for determining credit ratings.[141]

Submit to the OCR an annual internal control report.

Adhere to rules established by the Commission to prevent sales and marketing considerations from influencing the ratings issued by a NRSRO.

Policies and procedures with regard to (1) certain employment transitions to avoid conflicts of interest, (2) the processing of complaints regarding NRSRO noncompliance, and (3) notification to users of identified significant errors are required.

Compensation of the compliance officer may not be linked to the financial performance of the NRSRO.

The duty to report to appropriate authorities credible allegations of unlawful conduct by issuers of securities.[141]

The consideration of credible information about an issuer from sources other than the issuer or underwriter that is potentially significant to a rating decision.

The Act establishes corporate governance, organizational, and management of conflict of interest guidelines. A minimum of 2 independent directors is required.[141]

Subtitle C grants the Commission some authority to either temporarily suspend or permanently revoke the registration of an NRSRO respecting a particular class or subclass of securities if after noticing and hearing that the NRSRO lacks the resources to produce credit ratings with integrity.[141] Additional key provisions of the Act are

The Commission shall prescribe rules with respect to credit rating procedures and methodologies.

OCR is required to conduct an examination of each NRSRO at least annually and shall produce a public inspection report.

Moreover, Subtitle C requires the SEC to conduct a study on strengthening the NRSRO's independence, and it recommends the organization to utilize its rule-making authority to establish guidelines preventing improper conflicts of interest arising from the performance of services unrelated to the issuance of credit ratings such as consulting, advisory, and other services.[142] The Act requires the comptroller general of the United States to conduct a study on alternative business models for compensating NRSROs[143]

In Subtitle D, the term "Asset-Backed Security" is defined as a fixed-income or other security collateralized by any self-liquidating financial asset, such as a loan, lease, mortgage, allowing the owner of the asset-backed security to receive payments depending on the cash flow of the (ex.) loan. For regulation purposes, asset-backed securities include (but are not limited to)[144]

The law required credit risk retention regulations (where 5% of the risk was retained) within nine months of enactment,.[145] Proposals had been highly criticized due to restrictive definitions on "qualified residential mortgages" with restrictive down-payment and debt-to-income requirements.[146] In the August 2013 proposal, the 20% down-payment requirement was dropped.[147] In October 2014, six federal agencies (Fed, OCC, FDIC, SEC, FHFA, and HUD) finalized their joint asset-backed securities rule.[148]

Regulations for assets that are

Residential in nature are jointly prescribed by the SEC, the secretary of housing and urban development, and the Federal Housing Finance Agency

In general, the federal banking agencies and the SEC

Specifically, securitizers are

Prohibited from hedging or transferring the credit risk it is required to retain with respect to the assets

Required to retain not less than 5 percent of the credit risk for an asset that is not a qualified residential mortgage,[149]

For commercial mortgages or other types of assets, regulations may provide for retention of less than 5 percent of the credit risk, provided that there is also disclosure

The regulations are to prescribe several asset classes with separate rules for securitizers, including (but not limited to) residential mortgages, commercial mortgages, commercial loans, and auto loans. Both the SEC and the federal banking agencies may jointly issue exemptions, exceptions, and adjustments to the rules issues provided that they[150]

Help ensure high-quality underwriting standards for the securitizers and originators of assets that are securitized or available for securitization

Encourage appropriate risk management practices by the securitizers and originators of assets, improve the access of consumers and businesses to credit on reasonable terms, or otherwise be in the public interest and for the protection of investors

Additionally, the following institutions and programs are exempt:

Farm Credit System

Qualified Residential Mortgages (which are to be jointly defined by the federal banking agencies, SEC, secretary of housing and urban development, and the director of the Federal Housing Finance Agency)

The SEC may classify issuers and prescribe requirements appropriate for each class of issuers of asset-backed securities.[151] The SEC must also adopt regulations requiring each issuer of an asset-backed security to disclose, for each tranche or class of security, information that will help identify each asset backing that security.[152] Within six months of enactment, the SEC must issue regulations prescribing representations and warranties in the marketing of asset-backed securities:[153]

The representations, warranties, and enforcement mechanisms available to investors

How they differ from the representations, warranties, and enforcement mechanisms in issuances of similar securities

Require any securitizer to disclose fulfilled and unfulfilled repurchase requests across all trusts aggregated by the securitizer, so that investors may identify asset originators with clear underwriting deficiencies

The SEC shall also prescribe a due diligence analysis/review of the assets underlying the security, and a disclosure of that analysis.

Within one year of enactment, the SEC must issue rules directing the national securities exchanges and associations to prohibit the listing of any security of an issuer not in compliance of the requirements of the compensation sections.[154] At least once every three years, a public corporation is required to submit the approval of executive compensation to a shareholder vote. And once every six years, there should be a submitted to shareholder vote whether the required approval of executive compensation should be usually that once every three years.[155] Shareholders may disapprove any Golden Parachute compensation to executives via a non-binding vote.[156] Shareholders must be informed of the relationship between executive compensation actually paid and the financial performance of the issuer, taking into account any change in the value of the shares of stock and dividends of the issuer and any distributions[157] as well as[158]

The median of the annual total compensation of all employees of the issuer, except the chief executive officer (or any equivalent position)

The annual total compensation of the chief executive officer, or any equivalent position

The ratio of the amount of the median of the annual total with the total CEO compensation

The company must also disclose to shareholders whether any employee or member of the board of directors is permitted to purchase financial instruments designed to hedge or offset any decrease in the market value of equity securities that are part of a compensation package.[159] Members of the board of director's compensation committee have to be independent in the board of directors, a compensation consultant or legal counsel, as provided by rules issued by the SEC.[160] Within 9 months of enacting this legislation, federal regulators shall proscribe regulations that a covered company must disclose to the appropriate federal regulator, all incentive-based compensation arrangements with sufficient information such that the regulator may determine[161]

Whether the compensation package could lead to material financial loss to the company

Provides the employee/officer with excessive compensation, fees, or benefits

Subtitle F—Improvements to the Management of the Securities and Exchange Commission[edit]

Subtitle F contains various managerial changes intended to increase and implement the agency's efficiency, including reports on internal controls, a triennial report on personnel management by the head of the GAO (the Comptroller General of the United States), a hotline for employees to report problems in the agency, a report by the GAO on the oversight of National Securities Associations, and a report by a consultant on reform of the SEC. Under Subtitle J, the SEC will be funded through "match funding," which will in effect mean that its budget will be funded through filing fees.[119]:81

Subtitle G provides the SEC to issue rules and regulations including a requirement permitting a shareholder to use a company's proxy solicitation materials for nominating individuals to membership on the board of directors.[162] The company is also required to inform investors regarding why the same person is to serve as the board of directors' chairman and its chief executive officer, or the reason that different individuals must serve as the board's chairman or CEO.[163]

This provision of the statute creates a guarantee of trust correlating a municipal adviser (who provides advice to state and local governments regarding investments)[164] with any municipal bodies providing services. Also, it alters the make-up of the Municipal Securities rulemaking board ("MSRB") and mandates that the comptroller general conduct studies in relation to municipal disclosure and municipal markets. The new MSRB will be composed of 15 individuals. Also, it will have the authority to regulate municipal advisers and will be permitted to charge fees regarding trade information. Furthermore, it is mandated that the comptroller general make several recommendations, which must be submitted to Congress within 24 months of enacting the law.[164][165]

Subtitle I is concerned with establishing a public company accounting oversight board (PCAOB). The PCAOB has the authority to establish oversight of certified public accounting firms. Its provision allows the SEC to authorize necessary rules respecting securities for borrowing. The SEC shall, as deemed appropriate, exercise transparency within this sector of the financial industry.[166] A council of inspectors general on financial oversight, composed of several members of federal agencies (such as the Department of the Treasury, the FDIC, and the Federal Housing Finance Agency) will be established.[167] The council will more easily allow the sharing of data with inspectors general (which includes members by proxy or in person from the SEC and CFTC) with a focus on dealings that may be applicable to the general financial sector largely focusing on the financial oversight's improvement.[168]

This section needs expansion. You can help by adding to it.(October 2010)

Subtitle J provides adjustments to Section 31 of the Securities Exchange Act of 1934 regarding the "Recovery Cost of Annual Appropriation," the "Registration of Fees" and the "Authorization of Appropriations" provisions of the Act.

Title X, or the "Consumer Financial Protection Act of 2010",[169] establishes the Bureau of Consumer Financial Protection. The new Bureau regulates consumer financial products and services in compliance with federal law.[45] The Bureau is headed by a director appointed by the President, with advice and consent from the Senate, for five-year term.[45] The Bureau is subject to financial audit by the GAO, and must report to the Senate Banking Committee and the House Financial Services Committee bi-annually. The Financial Stability Oversight Council may issue a "stay" to the Bureau with an appealable 2/3 of the vote. The Bureau is not placed within the Fed, but it operates independently.[170] The Fed is prohibited from interfering with matters before the Director, directing any employee of the Bureau, modifying the Bureau's functions and responsibilities or impeding an order of the Bureau.[45] The Bureau is separated into six divisions:[45]

Within the Bureau, a new Consumer Advisory Board assists the Bureau and informs it of emerging market trends.[45] This Board is appointed by the Bureau's Director, with at least six members recommended by regional Fed Presidents.[45]Elizabeth Warren was the first appointee of the President as an adviser to get the Bureau operating. The Consumer Financial Protection Bureau can be found on the web.

The Bureau was formally established when Dodd–Frank was enacted, on July 21, 2010. After a one-year "stand up" period, the Bureau obtained enforcement authority and began most activities on July 21, 2011.[172]

The Durbin Amendment targeting interchange fees is also in Title X, under Subtitle G, section 1075.[173]

A new position is created on the Board of Governors, the "Vice Chairman for Supervision", to advise the Board in several areas and[174]

Serves in the absence of the chairman

Is responsible for developing policy recommendations to the Board regarding supervision and regulation of financial institution supervised by the board

Oversees the supervision and regulation of such firms

Reports to Congress on a semiannual basis to disclose their activities and efforts, testifying before Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives

Additionally, the GAO is now required to perform several different audits of the Fed:[174]

A one-time audit of any emergency lending facility established by the Fed since December 1, 2007 and ending with the date of enactment of this Act

A Federal Reserve Governance Audit that shall examine:

The extent to which the current system of appointing Federal reserve bank directors represents "the public, without discrimination on the basis of race, creed, color, sex or national origin, and with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consumers"

Whether there are actual or potential conflicts of interest

Examine each facilities operation

Identify changes to selection procedures for Federal reserve bank directors or to other aspects of governance that would improve public representation and increase the availability of monetary information

The Fed may establish additional standards that include, but are not limited to

A contingent capital requirement

Enhanced public disclosure

Short-term debt limits

The Fed may require supervised companies to "maintain a minimum amount of contingent capital that is convertible to equity in times of financial stress".[177]

Title XI requires companies supervised by the Fed to periodically provide additional plans and reports, including:"[178]

A plan for a rapid and orderly liquidation of the company in the event of material financial distress or failure,

A credit exposure report describing the nature to which the company has exposure to other companies, and credit exposure cannot exceed 25% of the capital stock and surplus of the company."[179]

The title requires that in determining capital requirements for regulated organizations, off-balance-sheet activities shall be taken into consideration, being those things that create an accounting liability such as, but not limited to"[180]

Direct credit substitutes in which a bank substitutes its own credit for a third party, including standby letters of credit

Irrevocable letters of credit that guarantee repayment of commercial paper or tax-exempt securities

Title XII, known as the "Improving Access to Mainstream Financial Institutions Act of 2010",[181] provides incentives that encourage low- and medium-income people to participate in the financial systems. Organizations that are eligible to provide these incentives are 501(c)(3) and IRC§ 501(a) tax exempt organizations, federally insured depository institutions, community development financial institutions, state, local or tribal governments.[182] Multi-year programs for grants, cooperative agreements, etc., are also available to[183]

Enable low- and moderate-income individuals to establish one or more accounts in a federal insured bank

Prohibited from use as an offset for other spending increases or revenue reductions

The same conditions apply for any funds not used by the state under the American Recovery and Reinvestment Act of 2009 by December 31, 2012, provided that the President may waive these requirements if it is determined to be in the best interest of the nation.[186]

Title XIV, or the "Mortgage Reform and Anti-Predatory Lending Act",[187] whose subtitles A, B, C, and E are designated as Enumerated Consumer Law, which will be administered by the new Bureau of Consumer Financial Protection.[188] The section focuses on standardizing data collection for underwriting and imposes obligations on mortgage originators to only lend to borrowers who are likely to repay their loans.[189]

A "Residential Mortgage Originator" is defined as any person who either receives compensation for or represents to the public that they will take a residential loan application, assist a consumer in obtaining a loan, or negotiate terms for a loan. A residential Mortgage Originator is not a person who provides financing to an individual for the purchase of 3 or less[190] properties in a year, or a licensed real estate broker/associate.[191] All Mortgage Originators are to include on all loan documents any unique identifier of the mortgage originator provided by the Registry described in the Secure and Fair Enforcement for Mortgage Licensing Act of 2008[192]

For any residential mortgage loan, no mortgage originator may receive compensation that varies based on the term of the loan, other than the principal amount. In general, the mortgage originator can only receive payment from the consumer, except as provided in rules that may be established by the Board. Additionally, the mortgage originator must verify the consumer's ability to pay. A violation of the "ability to repay" standard, or a mortgage that has excessive fees or abusive terms, may be raised as a foreclosure defense by a borrower against a lender without regard to any statute of limitations. The Act bans the payment of yield spread premiums or other originator compensation that is based on the interest rate or other terms of the loans.[193]

In effect, this section of the Act establishes national underwriting standards for residential loans. It is not the intent of this section to establish rules or regulations that would require a loan to be made that would not be regarded as acceptable or prudential by the appropriate regulator of the financial institution. However, the loan originator shall make a reasonable and good faith effort based on verified and documented information that "at the time the loan is consummated, the consumer has a reasonable ability to repay the loan, according to the terms, and all applicable taxes, insurance (including mortgage guarantee insurance), and other assessments". Also included in these calculations should be any payments for a second mortgage or other subordinate loans. Income verification is mandated for residential mortgages.[194] Certain loan provisions, including prepayment penalties on some loans, and mandatory arbitration on all residential loans, are prohibited.[195]

This section also defined a "Qualified Mortgage" as any residential mortgage loan that the regular periodic payments for the loan does not increase the principal balance or allow the consumer to defer repayment of principal (with some exceptions), and has points and fees being less than 3% of the loan amount. The Qualified Mortgage terms are important to the extent that the loan terms plus an "Ability to Pay" presumption create a safe harbor situation concerning certain technical provisions related to foreclosure.[196]

A "High-Cost Mortgage" as well as a reverse mortgage are sometimes referred to as "certain home mortgage transactions" in the Fed's Regulation Z (the regulation used to implement various sections of the Truth in Lending Act) High-Cost Mortgage is redefined as a "consumer credit transaction that is secured by the consumer's principal dwelling" (excluding reverse mortgages that are covered in separate sections), which include:[197]

Credit Transactions secured by consumer's principal dwelling and interest rate is 6.5% more than the prime rate for comparable transactions

subordinated (ex. second mortgage) if secured by consumer's principal dwelling and interest rate is 8.5% more than the prime rate for comparable transactions

under certain conditions, if the fees and points may be collected more than 36 months after loan is executed

New provisions for calculating adjustable rates as well as definitions for points and fees are also included.

When receiving a High-Cost mortgage, the consumer must obtain pre-loan counseling from a certified counselor.[198] The Act also stipulates there are additional "Requirements to Existing Residential Mortgages". The changes to existing contracts are:

Subtitle D, known as the Expand and Preserve Home Ownership Through Counseling Act,[202] creates a new Office of Housing Counseling, within the department of Housing and Urban Development. The director reports to the Secretary of Housing and Urban Development. The Director shall have primary responsibility within the Department for consumer oriented homeownership and rental housing counseling. To advise the Director, the Secretary shall appoint an advisory committee of not more than 12 individuals, equally representing mortgage and real estate industries, and including consumers and housing counseling agencies. Council members are appointed to 3-year terms. This department will coordinate media efforts to educate the general public in home ownership and home finance topics.[203]

The secretary of housing and urban development is authorized to provide grants to HUD-approved housing counseling agencies and state Housing Finance Agencies to provide education assistance to various groups in home ownership.[204] The Secretary is also instructed, in consultation with other federal agencies responsible for financial and banking regulation, to establish a database to track foreclosures and defaults on mortgage loans for 1 through 4 unit residential properties.[205]

Subtitle E concerns jumbo rules concerning escrow and settlement procedures for people who are in trouble repaying their mortgages, and also makes amendments to the Real Estate Settlement Procedures Act of 1974. In general, in connection with a residential mortgage there should be an established escrow or impound account for the payment of taxes, hazard insurance, and (if applicable) flood insurance, mortgage insurance, ground rents, and any other required periodic payments. Lender shall disclose to borrower at least three business days before closing the specifics of the amount required to be in the escrow account and the subsequent uses of the funds.[206] If an escrow, impound, or trust account is not established, or the consumer chooses to close the account, the servicer shall provide a timely and clearly written disclosure to the consumer that advises the consumer of the responsibilities of the consumer and implications for the consumer in the absence of any such account.[207] The amendments to the Real Estate Settlement Procedures Act of 1974 (or RESPA) change how a Mortgage servicer (those who administer loans held by Fannie Mae, Freddie Mac, etc.) should interact with consumers.[208]

A creditor may not extend credit for a higher-risk mortgage to a consumer without first obtaining a written appraisal of the property with the following components:[209]

Physical Property Visit – including a visit of the interior of the property

Second Appraisal Circumstances – creditor must obtain a second appraisal, with no cost to the applicant, if the original appraisal is over 180 days old or if the current acquisition price is lower than the previous sale price

A "certified or licensed appraiser" is defined as someone who:

is certified or licensed by the state in which the property is located

ensure a high level of confidence in the estimates produced by automated valuation models;

protect against the manipulation of data;

seek to avoid conflicts of interest;

require random sample testing and reviews; and

account for any other such factor that those responsible for formulating regulations deem appropriate

The Fed, the comptroller of the currency, the FDIC, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection, in consultation with the staff of the appraisal subcommittee and the Appraisal Standards Board of The Appraisal Foundation, shall promulgate regulations to implement the quality control standards required under this section that devises Automated Valuation Models.

Residential and 1- to 4-unit single family residential real estate are enforced by: Federal Trade Commission, the Bureau of Consumer Financial Protection, and a state attorney general. Commercial enforcement is by the Financial regulatory agency that supervised the financial institution originating the loan.

Broker Price Opinions may not be used as the primary basis to determine the value of a consumer's principal dwelling; but valuation generated by an automated valuation model is not considered a Broker Price Opinion.

The standard settlement form (commonly known as the HUD 1) may include, in the case of an appraisal coordinated by an appraisal management company, a clear disclosure of:[211]

the fee paid directly to the appraiser by such company

the administration fee charged by such company

Within one year, the Government Accountability Office shall conduct a study on the effectiveness and impact of various appraisal methods, valuation models and distribution channels, and on the home valuation code of conduct and the appraisal subcommittee.[212]

creating sustainable financing of such properties, that may take into consideration such factors as:

the rental income generated by such properties

the preservation of adequate operating reserves

maintaining the current level of federal, state, and city subsidies

funds for rehabilitation

facilitating the transfer of such properties, when appropriate and with the agreement of owners

Previously the Treasury Department has created the Home Affordable Modification Program, set up to help eligible home owners with loan modifications on their home mortgage debt. This section requires every mortgage servicer participating in the program and denies a re-modification request to provide the borrower with any data used in a net present value (NPV) analysis. The Secretary of the Treasury is also directed to establish a Web-based site that explains NPV calculations.[214]

The United Nations Security Council committee charged with overseeing conflict minerals issues reported that this legislation was a "catalyst" for efforts to save lives by cutting off a key source of funding for armed groups.[225]

Requires the SEC to report on mine safety by gathering information on violations of health or safety standards, citations and orders issued to mine operators, number of flagrant violations, value of fines, number of mining-related fatalities, etc., to determine whether there is a pattern of violations.[226]

Reporting on payments by oil, gas and minerals industries for acquisition of licenses[edit]

The Securities Exchange Act of 1934 is amended to require disclosure of payments relating to the acquisition of licenses for exploration, production, etc., where "payment" includes fees, production entitlements, bonuses, and other material benefits.[227] The act states in SEC. 1504 (3) that these documents will be made available online to the public.[227]

The Comptroller General is commissioned to assess the relative independence, effectiveness, and expertise of presidentially appointed inspectors general and inspectors general of federal entities.[228]

A Section 1256 Contract refers to a section of the IRC§ 1256 that described tax treatment for any regulated futures contract, foreign currency contract or non-equity option. To calculate capital gains or losses, these trades have traditionally been marked to market on the last business day of the year. A "section 1256 contract" shall not include:[230]

any securities futures contract or option on such a contract unless such contract or option is a dealer securities futures contract

swap form of a derivative, such as interest rate swaps, currency swaps, etc.

Senator Chris Dodd, who co-proposed the legislation, has classified the legislation as "sweeping, bold, comprehensive, [and] long overdue". In regards to the Fed and what he regarded as their failure to protect consumers, Dodd voiced his opinion that "[...] I really want the Federal Reserve to get back to its core enterprises [...] We saw over the last number of years when they took on consumer protection responsibilities and the regulation of bank holding companies, it was an abysmal failure. So the idea that we're going to go back and expand those roles and functions at the expense of the vitality of the core functions that they're designed to perform is going in the wrong way." However, Dodd pointed out that the transfer of powers from the Fed to other agencies should not be construed as criticism of Fed Chairman Ben Bernanke, but rather that "[i]t's about putting together an architecture that works".[231]

With regards to the lack of bipartisan input on the legislation, Dodd alleged that had he put together a "[...] bipartisan compromise, I think you make a huge mistake by doing that. You're given very few moments in history to make this kind of a difference, and we're trying to do that." Put another way, Dodd construed the lack of Republican amendments as a sign "[...] that the bill is a strong one".[231][232]

Richard Shelby, the top-ranking Republican on the Senate Banking Committee and the one who proposed the changes to the Fed governance, voiced his reasons for why he felt the changes needed to be made: "It's an obvious conflict of interest [...] It's basically a case where the banks are choosing or having a big voice in choosing their regulator. It's unheard of." Democratic Senator Jack Reed agreed, saying "The whole governance and operation of the Federal Reserve has to be reviewed and should be reviewed. I don't think we can just assume, you know, business as usual."[233]

Barney Frank, who in 2003 told auditors warning him of the risk caused by government subsidies in the mortgage market, "I want to roll the dice a little bit more in this situation toward subsidized housing" [234] proposed his own legislative package of financial reforms in the House, did not comment on the Stability Act directly, but rather indicated that he was pleased that reform efforts were happening at all: "Obviously, the bills aren't going to be identical, but it confirms that we are moving in the same direction and reaffirms my confidence that we are going to be able to get an appropriate, effective reform package passed very soon."[232]

During a Senate Republican press conference on April 21, 2010, Richard Shelby reported that he and Dodd were meeting "every day" and were attempting to forge a bipartisan bill. Shelby also expressed his optimism that a "good bill" will be reached, and that "we're closer than ever." Saxby Chambliss echoed Shelby's sentiments, saying, "I feel exactly as Senator Shelby does about the Banking Committee negotiations," but voiced his concern about maintaining an active derivatives market and not driving financial firms overseas. Kay Bailey Hutchison indicated her desire to see state banks have access to the Fed, while Orrin Hatch had concerns over transparency, and the lack of Fannie and Freddy reform.[235]

Ed Yingling, president of the American Bankers Association, regarded the reforms as haphazard and dangerous, saying, "To some degree, it looks like they're just blowing up everything for the sake of change. . . . If this were to happen, the regulatory system would be in chaos for years. You have to look at the real-world impact of this."[232]

An editorial in the Wall Street Journal speculated that the law would make it more expensive for startups to raise capital and create new jobs;[241] other opinion pieces suggest that such an impact would be due to a reduction in fraud or other misconduct.[242]

The tier 1 ratio represents the strength of the financial cushion that a bank maintains; the higher the ratio, the stronger the financial position of the bank, other things equal. Dodd–Frank set standards for improving this ratio and has been successful in that regard.[243]

The Dodd–Frank Act has several provisions that call upon the Securities and Exchange Commission (SEC) to implement several new rules and regulations that will affect corporate governance issues surrounding public corporations in the United States. Many of the provisions put in place by Dodd–Frank require the SEC to implement new regulations, but intentionally do not give specifics as to when regulations should be adopted or exactly what the regulations should be.[244] This will allow the SEC to implement new regulations over several years and make adjustments as it analyzes the environment.[244] Public companies will have to work to adopt new policies in order to adapt to the changing regulatory environment they will face over the coming years.

Section 951 of Dodd–Frank deals with executive compensation.[245] The provisions require the SEC to implement rules that require proxy statements for shareholder meetings to include a vote for shareholders to approve executive compensation by voting on "say on pay" and "golden parachutes."[246][247] SEC regulations require that at least once every three years shareholders have a non-binding say-on-pay vote on executive compensation.[246] While shareholder are required to have a say-on-pay vote at least every three years, they can also elect to vote annually, every two years, or every third year.[246][247] The regulations also require that shareholders have a vote at least every six years to decide how often they would like to have say-on-pay votes.[247] In addition, companies are required to disclose any golden parachute compensation that may be paid out to executives in the case of a merger, acquisition, or sale of major assets.[246]Proxy statements must also give shareholders the chance to cast a non-binding vote to approve golden parachute policies.[248] Although these votes are non-binding and do not take precedence over the decisions of the board, failure to give the results of votes due consideration can cause negative shareholder reactions.[248] Regulations covering these requirements were implemented in January 2011 and took effect in April 2011.[245][249]

Section 952 of Dodd–Frank deals with independent compensation committees as well as their advisors and legal teams.[245] These provisions require the SEC to make national stock exchanges set standards for the compensation committees of publicly traded companies listed on these exchanges.[245] Under these standards national stock exchanges are prohibited from listing public companies that do not have an independent compensation committee.[247] To insure that compensation committees remain independent, the SEC is required to identify any areas that may create a potential conflict of interest and work to define exactly what requirements must be met for the committee to be considered independent.[247][248] Some of the areas examined for conflicts of interest include other services provided by advisors, personal relationships between advisors and shareholders, advisor fees as a percentage of their company's revenue, and advisors' stock holdings.[248] These provisions also cover advisors and legal teams serving compensation committees by requiring proxy statements to disclose any compensation consultants and include a review of each to ensure no conflicts of interest exist.[246] Compensation committees are fully responsible for selecting advisors and determining their compensation.[248] Final regulations covering issues surrounding compensation committees were implemented in June 2012 by the SEC and took effect in July 2012.[245] Under these regulations the New York Stock Exchange (NYSE) and NASDAQ also added their own rules regarding the retention of committee advisors.[249] These regulations were approved by the SEC in 2013 and took full effect in early 2014.[245][249]

Section 953 of Dodd–Frank deals with pay for performance policies to determine executive compensation.[245] Provisions from this section require the SEC to make regulations regarding the disclosure of executive compensation as well as regulations on how executive compensation is determined.[247] New regulations require that compensation paid to executives be directly linked to financial performance including consideration of any changes in the value of the company's stock price or value of dividends paid out.[246] The compensation of executives and the financial performance justifying it are both required to be disclosed.[248] In addition, regulations require that CEO compensation be disclosed alongside the median employee compensation excluding CEO compensation, along with ratios comparing levels of compensation between the two.[248] Regulations regarding pay for performance were proposed by the SEC in September 2013 and were adopted in August 2015.[245][250]

Section 954 of Dodd–Frank deals with clawback of compensation policies, which work to ensure that executives do not profit from inaccurate financial reporting.[245] These provisions require the SEC to create regulations that must be adopted by national stock exchanges, which in turn require publicly traded companies who wish to be listed on the exchange to have clawback policies.[247] These policies require executives to return inappropriately awarded compensation, as set forth in section 953 regarding pay for performance, in the case of an accounting restatement due to noncompliance with reporting requirements.[247] If an accounting restatement is made then the company must recover any compensation paid to current or former executives associated with the company the three years prior to the restatement.[248] The SEC proposed regulations dealing with clawback of compensation in July 2015.[251]

Section 955 of Dodd–Frank deals with employees' and directors' hedging practices.[247] These provisions stipulate that the SEC must implement rules requiring public companies to disclose in proxy statements whether or not employees and directors of the company are permitted to hold a short position on any equity shares of the company.[247] This applies to both employees and directors who are compensated with company stock as well as those who are simply owners of company stock.[248] The SEC proposed rules regarding hedging in February 2015.[252]

Section 957 deals with broker voting and relates to section 951 dealing with executive compensation.[247] While section 951 requires say on pay and golden parachute votes from shareholders, section 957 requires national exchanges to prohibit brokers from voting on executive compensation.[245] In addition, the provisions in this section prevent brokers from voting on any major corporate governance issue as determined by the SEC including the election of board members.[247] This gives shareholders more influence on important issues since brokers tend to vote shares in favor of executives.[247] Brokers may only vote shares if they are directly instructed to do so by shareholders associated with the shares.[246] The SEC approved the listing rules set forth by the NYSE and NASDAQ regarding provisions from section 957 in September 2010.[249]

Additional provisions set forth by Dodd–Frank in section 972 require public companies to disclose in proxy statements reasons for why the current CEO and chairman of the board hold their positions.[246][247] The same rule applies to new appointments for CEO or chairman of the board.[246] Public companies must find reasons supporting their decisions to retain an existing chairman of the board or CEO or reasons for selecting new ones to keep shareholders informed.[252]

Provisions from Dodd–Frank found in section 922 also address whistle blower protection.[245] Under new regulations any whistle blowers who voluntarily expose inappropriate behavior in public corporations can be rewarded with substantial compensation and will have their jobs protected.[248] Regulations entitle whistle blowers to between ten and thirty percent of any monetary sanctions put on the corporation above one million dollars.[248] These provisions also enact anti-retaliation rules that entitle whistle blowers the right to have a jury trial if they feel they have been wrongfully terminated as a result of whistle blowing.[248] If the jury finds that whistle blowers have been wrongfully terminated, then they must be reinstated to their positions and receive compensation for any back-pay and legal fees.[248] This rule also applies to any private subsidiaries of public corporations.[248] The SEC put these regulations in place in May 2011.[245]

Section 971 of Dodd–Frank deals with proxy access and shareholders' ability to nominate candidates for director positions in public companies.[247] Provisions in the section allow shareholders to use proxy materials to contact and form groups with other shareholders in order to nominate new potential directors.[244] In the past, activist investors had to pay to have materials prepared and mailed to other investors in order to solicit their help on issues.[244] Any shareholder group that has held at least three percent of voting shares for a period of at least three years is entitled to make director nominations.[248] However, shareholder groups may not nominate more than twenty five percent of a company's board and may always nominate at least one member even if that one nomination would represent over twenty five percent of the board.[248] If multiple shareholder groups make nominations then the nominations from groups with the most voting power will be considered first with additional nominations being considered up to the twenty five percent cap.[248]

On April 21, 2010, the CBO released a cost-estimate of enacting the legislation. In its introduction, the CBO briefly discussed the legislation and then went on to generally state that it is unable to assess the cost of financial crises under current law, and added that estimating the cost of similar crises under this legislation (or other proposed ideas) is equally (and inherently) difficult: "[...] CBO has not determined whether the estimated costs under the Act would be smaller or larger than the costs of alternative approaches to addressing future financial crises and the risks they pose to the economy as a whole."[262]

In terms of the impact on the federal budget, the CBO estimates that deficits would reduce between 2011–2020, but in part due to the risk-based assessment fees levied to initially capitalize the Orderly Liquidation Fund; after which, the majority of revenue for the fund would be drawn primarily from interest payments. Due to this, the CBO projects that eventually the money being paid into the Fund (in the form of fees) would be exceeded by the expenses of the Fund itself. Additionally, the CBO points out that the reclassification of collected fees by various government agencies has the effect of boosting revenue.[262]

The cost estimate also raises questions about the time-frame of capitalizing the Fund – their estimate took the projected value of fees collected for the Fund (and interest collected on the Fund) weighed against the expected expense of having to deal with corporate default(s) until 2020. Their conclusion was it would take longer than 10 years to fully capitalize the Fund (at which point they estimated it would be approximately 45 billion), although no specifics beyond that were expressed.[262]

The projection was a $5 billion or more deficit increase in at least one of the ten-year periods starting in 2021.[262]

Associated Press reported that in response to the costs that the legislation places on banks, some banks have ended the practice of giving their customers free checking.[263] Small banks have been forced to end some businesses such as mortgages and car loans in response to the new regulations. The size of regulatory compliance teams has grown.[264] The Heritage Foundation, calling attention to the new ability of borrowers to sue lenders for misjudging their ability to repay a loan, predicted that smaller lenders would be forced to exit the mortgage market due to increased risk.[265] One study has shown that smaller banks have been hurt by the regulations of the Dodd–Frank Act. Community banks' share of the US banking assets and lending market fell from over 40% in 1994 to around 20% today, although this is a misleading at best but highly likely inaccurate number considering the Dodd-Frank was implemented 16 years later than 1994. These experts believe that regulatory barriers fall most heavily on small banks, even though legislators intended to target large financial institutions.[266]

Complying with the statute seems to have resulted in job shifting or job creation in the business of fulfilling reporting requirements,[267] while making it more difficult to fire employees who report criminal violations.[268] Opponents of the Dodd–Frank Law believe that it will affect job creation, in a sense that because of stricter regulation unemployment will increase significantly. However, the Office of Management and Budget attempts to "monetize" benefits versus costs to prove the contrary. The result is a positive relationship where benefits exceed costs: "During a 10-year period OMB reviewed 106 major regulations for which cost and benefit data were available [...] $136 billion to $651 billion in annual benefits versus $44 billion to $62 billion in annual costs" (Shapiro and Irons, 2011, p. 8).[269]

According to Federal Reserve Chairwoman Janet Yellen in August 2017, "The balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth."[270]

Some experts have argued that Dodd–Frank does not protect consumers adequately and does not end too big to fail.[271]

Law professor and bankruptcy expert David Skeel concluded that the law has two major themes: "government partnership with the largest Wall Street banks and financial institutions" and "a system of ad hoc interventions by regulators that are divorced from basic rule-of-law constraints". While he states that "the overall pattern of the legislation is disturbing", he also concludes that some are clearly helpful, such as the derivatives exchanges and the Consumer Financial Protection Bureau.[272]

Regarding the Republican-led rollback of some provisions of Dodd-Frank in 2018, this move from increased regulation after a crisis to deregulation during an economic boom has been a recurrent feature in the United States.[273]

The SEC's 2017 annual report on the Dodd-Frank whistleblower program stated: "Since the program’s inception, the SEC has ordered wrongdoers in enforcement matters involving whistleblower information to pay over $975 million in total monetary sanctions, including more than $671 million in disgorgement of ill-gotten gains and interest, the majority of which has been...returned to harmed investors." Whistleblowers receive 10-30% of this amount under the Act.[274]

The Act established the Consumer Financial Protection Bureau (CFPB), which has the mission of protecting consumers in the financial markets. Then-CFPB Director Richard Cordray testified on April 5, 2017 that: "Over the past five years, we have returned almost $12 billion to 29 million consumers and imposed about $600 million in civil penalties."[12] The CFPB publishes a semi-annual report on its activities.[275]

^ abBorak, Donna (June 8, 2017). "House votes to kill Dodd-Frank. Now what?". Archived from the original on November 29, 2017. Retrieved June 9, 2017. ..."advanced the 'crown jewel' of the GOP-led regulatory reform effort, effectively gutting the Dodd-Frank financial regulations that were put in place during the Obama administration."

^Paul Krugman (2016-02-03). "Half A Loaf, Financial Reform Edition". Archived from the original on 2017-08-23. Should we have had a stiffer financial reform? Definitely — required capital ratios should be a lot higher than they are. But Dodd–Frank's rules — especially, I think, the prospect of being classed as a SIFI, a strategically important institution subject to tighter constraints, have had a real effect in reducing risk.

^H.R. 4173, § 502: Subchapter I of chapter 3 of subtitle I of title 31, United States Code, is amended—(1) by redesignating section 312 as section 315; (2) by redesignating section 313 as section 312; and (3) by inserting: Sec 313 Federal Insurance Office

^H.R. 4173, § 1432; amending section 129(e) of the Truth in Lending Act (15 U.S.C.§ 1639(e)) is amended to read as follows: (e) NO BALLOON PAYMENTS.—No high-cost mortgage may contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This subsection shall not apply when the payment schedule is adjusted to the seasonal or irregular income of the consumer.

The Democratic Party is one of the two major contemporary political parties in the United States, along with the Republican Party. The Democrats dominant worldview was once socially conservative and fiscally classical liberalism, especially in the rural South, since Franklin D. Roosevelt and his New Deal coalition in the 1930s, the Democratic Party has promoted a social-liberal platform, supporting social justice. Today, the House Democratic caucus is composed mostly of progressives and centrists, the partys philosophy of modern liberalism advocates social and economic equality, along with the welfare state. It seeks to provide government intervention and regulation in the economy, the party has united with smaller left-wing regional parties throughout the country, such as the Farmer–Labor Party in Minnesota and the Nonpartisan League in North Dakota. Well into the 20th century, the party had conservative pro-business, the New Deal Coalition of 1932–1964 attracted strong support from voters of recent European extraction—many of whom were Catholics based in the cities.

After Franklin D. Roosevelts New Deal of the 1930s, the pro-business wing withered outside the South, after the racial turmoil of the 1960s, most southern whites and many northern Catholics moved into the Republican Party at the presidential level. The once-powerful labor union element became smaller and less supportive after the 1970s, white Evangelicals and Southerners became heavily Republican at the state and local level in the 1990s. However, African Americans became a major Democratic element after 1964, after 2000, Hispanic and Latino Americans, Asian Americans, the LGBT community, single women and professional women moved towards the party as well. The Northeast and the West Coast became Democratic strongholds by 1990 after the Republicans stopped appealing to socially liberal voters there, the Democratic Party has retained a membership lead over its major rival the Republican Party. The most recent was the 44th president Barack Obama, who held the office from 2009 to 2017, in the 115th Congress, following the 2016 elections, Democrats are the opposition party, holding a minority of seats in both the House of Representatives and the Senate.

The party holds a minority of governorships, and state legislatures, though they do control the mayoralty of cities such as New York City, Los Angeles, Chicago and Washington, D. C. The Democratic Party traces its origins to the inspiration of the Democratic-Republican Party, founded by Thomas Jefferson, James Madison and that party inspired the Whigs and modern Republicans. Organizationally, the modern Democratic Party truly arose in the 1830s, since the nomination of William Jennings Bryan in 1896, the party has generally positioned itself to the left of the Republican Party on economic issues. They have been liberal on civil rights issues since 1948. On foreign policy both parties changed position several times and that party, the Democratic-Republican Party, came to power in the election of 1800. After the War of 1812 the Federalists virtually disappeared and the national political party left was the Democratic-Republicans. The Democratic-Republican party still had its own factions, however.

As Norton explains the transformation in 1828, Jacksonians believed the peoples will had finally prevailed, through a lavishly financed coalition of state parties, political leaders, and newspaper editors, a popular movement had elected the president

The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement monetary policy of the United States, Governors are appointed by the President of the United States and confirmed by the Senate for staggered 14-year terms. By law, the appointments must yield a fair representation of the financial, industrial, the Board of Governors does not receive funding from Congress, and the terms of the seven members of the Board span multiple presidential and congressional terms. Once a member of the Board of Governors is appointed by the president, the Board is required to make an annual report of operations to the Speaker of the U. S. House of Representatives. It supervises and regulates the operations of the Federal Reserve Banks, membership is by statute limited in term, and a member that has served for a full 14 year term is not eligible for reappointment.

There are numerous occasions where an individual was appointed to serve the remainder of another members uncompleted term, the law provides for the removal of a member of the Board by the President for cause. The Chair and Vice Chair of the Board of Governors are appointed by the President from among the sitting Governors and they both serve a four-year term and they can be renominated as many times as the President chooses, until their terms on the Board of Governors expire

The laws are designed to prevent the businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors. They may provide protection for those most vulnerable in society. Consumer protection laws are a form of government regulation that aim to protect the rights of consumers, for example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. A consumer is defined as someone who acquires goods or services for use or ownership rather than for resale or use in production. Consumer protection can be asserted via non-government organizations and individuals as consumer activism, Consumer protection law or consumer law is considered an area of law that regulates private law relationships between individual consumers and the businesses that sell those goods and services. Its a way of preventing fraud and scams from service and sales contracts, bill collector regulation, utility turnoffs, the following lists consumer legislation at the nation-state level.

In the EU member states Germany and the United Kingdom there is the applicability of law at the EU level to be considered, in Australia, the corresponding agency is the Australian Competition and Consumer Commission or the individual State Consumer Affairs agencies. The Australian Securities and Investments Commission has responsibility for consumer protection regulation of financial services, however, in practice it does so through privately run EDR schemes such as the Financial Ombudsman Service. Germany as a state of the European Union is bound by the consumer protection directives of the European Union. A minister of the cabinet is responsible for consumer rights. In the current cabinet of Angela Merkel, this is Heiko Maas.84,71 BVerwGE 183), in India The Consumer protection act,1986 is governing consumer protection. Appeal could be filed to the State Consumer Disputes Redress Commissions, in recent years, many effective judgment have been passed by some state and National Consumer Forums.

The Sale of Goods Act of 1930 act provides some safeguards to buyers of goods if goods purchased do not fulfill the express or implied conditions, the Civil Code in Taiwan contains five books, General Principles, Rights over Things and Succession. The second book of the Code, the Book of Obligations, the Consumer Protection Commission of Executive Yuan serves as an ombudsman supervising, reporting any unsafe products/services and periodically reviewing the legislation. Specifics of the division of labour between the EU and the UK are detailed here, domestic laws originated within the ambit of contract and tort but, with the influence of EU law, it is emerging as an independent area of law. In many circumstances, where law is in question, the matter judicially treated as tort, contract. Consumer Protection issues are dealt with when complaints are made to the Director-General of Fair Trade, the Office of Fair Trading will investigate, impose an injunction or take the matter to litigation. However, consumers cannot directly complain to the OFT, complaints need to be made to the Citizens AdviceConsumer Service who will provide legal advice to complainants, or re-direct the individual complaint to Trading Standards for investigation

Each act and resolution of Congress is called a slip law, which is classified as either public law or private law, and designated and numbered accordingly. At the end of a Congress session, slip laws are compiled into Statutes at Large and they are part of a three-part model for publication of federal statutes consisting of slip laws, session laws, and codification. Today, large portions of slip laws denominated as public laws are now drafted as amendments to the United States Code. Once enacted into law, an Act will be published in the Statutes at Large and will add to, provisions of a public law that contains only enacting clauses, effective dates, and similar matters are not generally codified. Private laws are not generally codified, some portions of the United States Code have been enacted as positive law and other portions have not been so enacted. Publication of the United States Statutes at Large began in 1845 by the firm of Little, Brown. During Little and Companys time as publisher, Richard Peters, George Minot, in 1874, Congress transferred the authority to publish the Statutes at Large to the Government Printing Office under the direction of the Secretary of State.

633, was enacted July 30,1947 and directed the Secretary of State to compile, index,980, was enacted September 23,1950 and directed the Administrator of General Services to compile, edit and publish the Statutes at Large. Since 1985 the Statutes at Large have been prepared and published by the Office of the Federal Register of the National Archives, sometimes very large or long Acts of Congress are published as their own volume of the Statutes at Large. For example, the Internal Revenue Code of 1954 was published as volume 68A of the Statutes at Large. Volumes 1 to 18 of the Statutes at Large made available by the Library of Congress Volumes 1 to 64 of the Statutes at Large made available by the Congressional Data Coalition via LEGISWORKS

Eight years in 1909, President William Howard Taft expanded the West Wing and created the first Oval Office, in the main mansion, the third-floor attic was converted to living quarters in 1927 by augmenting the existing hip roof with long shed dormers. A newly constructed East Wing was used as an area for social events. East Wing alterations were completed in 1946, creating additional office space, by 1948, the houses load-bearing exterior walls and internal wood beams were found to be close to failure. Under Harry S. Truman, the rooms were completely dismantled. Once this work was completed, the rooms were rebuilt. The Executive Residence is made up of six stories—the Ground Floor, State Floor, Second Floor, the property is a National Heritage Site owned by the National Park Service and is part of the Presidents Park. In 2007, it was ranked second on the American Institute of Architects list of Americas Favorite Architecture, in May 1790, New York began construction of Government House for his official residence, but he never occupied it.

The national capital moved to Philadelphia in December 1790, the July 1790 Residence Act named Philadelphia, Pennsylvania the temporary national capital for a 10-year period while the Federal City was under construction. The City of Philadelphia rented Robert Morriss city house at 190 High Street for Washingtons presidential residence, the first president occupied the Market Street mansion from November 1790 to March 1797, and altered it in ways that may have influenced the design of the White House. As part of an effort to have Philadelphia named the permanent national capital, Pennsylvania built a much grander presidential mansion several blocks away. President John Adams occupied the Market Street mansion from March 1797 to May 1800, on Saturday, November 1,1800, he became the first president to occupy the White House. The Presidents House in Philadelphia became a hotel and was demolished in 1832, the Presidents House was a major feature of Pierre Charles LEnfants plan for the newly established federal city, Washington, D. C

Nine months later, Obama was named the 2009 Nobel Peace Prize laureate, during his first two years in office, Obama signed more landmark legislation than any Democratic president since LBJs Great Society. Main reforms were the Patient Protection and Affordable Care Act, the Dodd–Frank Wall Street Reform and Consumer Protection Act, after a lengthy debate over the national debt limit, Obama signed the Budget Control and the American Taxpayer Relief Acts. In foreign policy, Obama increased U. S. troop levels in Afghanistan, reduced nuclear weapons with the U. S. -Russian New START treaty, and ended military involvement in the Iraq War. He ordered military involvement in Libya in opposition to Muammar Gaddafi, after winning re-election over Mitt Romney, Obama was sworn in for a second term in 2013. Obama advocated gun control in response to the Sandy Hook Elementary School shooting, and issued wide-ranging executive actions concerning climate change and immigration. In foreign policy, Obama ordered military intervention in Iraq in response to gains made by ISIL after the 2011 withdrawal from Iraq, Obama left office in January 2017 with a 60% approval rating.

He currently resides in Washington, D. C and his presidential library will be built in Chicago. Obama was born on August 4,1961, at Kapiʻolani Maternity & Gynecological Hospital in Honolulu and he is the only President to have been born in Hawaii. He was born to a mother and a black father. His mother, Ann Dunham, was born in Wichita, Kansas, of mostly English descent, with some German, Scottish and his father, Barack Obama Sr. was a married Luo Kenyan man from Nyangoma Kogelo. Obamas parents met in 1960 in a Russian language class at the University of Hawaii at Manoa, the couple married in Wailuku, Hawaii on February 2,1961, six months before Obama was born. In late August 1961, Obamas mother moved him to the University of Washington in Seattle for a year

The President of the United States is the head of state and head of government of the United States. The president directs the executive branch of the government and is the commander-in-chief of the United States Armed Forces. The president is considered to be one of the worlds most powerful political figures, the role includes being the commander-in-chief of the worlds most expensive military with the second largest nuclear arsenal and leading the nation with the largest economy by nominal GDP. The office of President holds significant hard and soft power both in the United States and abroad, Constitution vests the executive power of the United States in the president. The president is empowered to grant federal pardons and reprieves. The president is responsible for dictating the legislative agenda of the party to which the president is a member. The president directs the foreign and domestic policy of the United States, since the office of President was established in 1789, its power has grown substantially, as has the power of the federal government as a whole.

However, nine vice presidents have assumed the presidency without having elected to the office. The Twenty-second Amendment prohibits anyone from being elected president for a third term, in all,44 individuals have served 45 presidencies spanning 57 full four-year terms. On January 20,2017, Donald Trump was sworn in as the 45th, in 1776, the Thirteen Colonies, acting through the Second Continental Congress, declared political independence from Great Britain during the American Revolution. The new states, though independent of each other as nation states, desiring to avoid anything that remotely resembled a monarchy, Congress negotiated the Articles of Confederation to establish a weak alliance between the states. Out from under any monarchy, the states assigned some formerly royal prerogatives to Congress, only after all the states agreed to a resolution settling competing western land claims did the Articles take effect on March 1,1781, when Maryland became the final state to ratify them.

In 1783, the Treaty of Paris secured independence for each of the former colonies, with peace at hand, the states each turned toward their own internal affairs. Prospects for the convention appeared bleak until James Madison and Edmund Randolph succeeded in securing George Washingtons attendance to Philadelphia as a delegate for Virginia. It was through the negotiations at Philadelphia that the presidency framed in the U. S. The first power the Constitution confers upon the president is the veto, the Presentment Clause requires any bill passed by Congress to be presented to the president before it can become law. Once the legislation has been presented, the president has three options, Sign the legislation, the bill becomes law. Veto the legislation and return it to Congress, expressing any objections, in this instance, the president neither signs nor vetoes the legislation

Volcker argued that such speculative activity played a key role in the financial crisis of 2007–2010. The rules provisions were scheduled to be implemented as a part of Dodd-Frank on July 21,2010, with preceding ramifications, on December 10,2013, the necessary agencies approved regulations implementing the rule, which were scheduled to go into effect April 1,2014. On January 14,2014, after a lawsuit by community banks over provisions concerning specialized securities, the rule came into effect on July 21,2015. On August 11,2016, several large banks requested a 5-year delay to exit illiquid investments, Volcker was appointed by President Barack Obama as the chair of the Presidents Economic Recovery Advisory Board on February 6,2009. President Obama created the board to advise the Obama Administration on economic recovery matters and he argued that the vast increase in the use of derivatives, designed to mitigate risk in the system, had produced exactly the opposite effect. The Volcker Rule was first publicly endorsed by President Obama on January 21,2010, on January 21,2010, under the same initiative, President Obama announced his intention to end the mentality of Too big to fail.

In a February 22,2010 letter to The Wall Street Journal, despite having wide support in the Senate, the amendment was never given a vote. When the Merkley-Levin Amendment was first brought to the floor, Senator Richard Shelby, Republican of Alabama and Levin responded by attaching the amendment to another amendment to the bill put forth by Senator Sam Brownback, Republican of Kansas. Shortly before it was due to be voted upon, Brownback withdrew his own amendment, thus killing the Merkley-Levin amendment, the original Merkley-Levin amendment and the final legislation both covered more types of proprietary trading than the original rule proposed by the administration. It banned conflict of interest trading and this is an important victory for fairness for investors such as pension funds and for the integrity of the financial system. The measure approved by the ends that type of conflict which Wall Street has engaged in. The Volcker rule was amended to allow banks to invest 3% of Tier 1 capital into hedge funds and private equity funds.

Proprietary trading in Treasuries, bonds issued by government-backed entities like Fannie Mae and Freddie Mac, Trading desks that will use the underwriting exception must estimate RENTD, which is defined differently for underwriting. Since the passage of the Financial Reform Bill, many banks, public comments to the Financial Stability Oversight Council on how exactly the rule should be implemented were submitted through November 5,2010. Financial firms such as Goldman Sachs, Bank of America, the proposed regulations were immediately criticized by banking groups as being too costly to implement, and by reform advocates for being weak and filled with loopholes. On January 12,2012 the U. S, commodity Futures Trading Commission issued substantially similar proposed regulations. Volcker himself stated that he would have preferred a simpler set of rules, Id love to see a four-page bill that bans proprietary trading and makes the board and chief executive responsible for compliance. If the banks didnt comply with the spirit of the bill, regulators gave the public until February 13,2012 to comment on the proposed draft of the regulations

The Great Recession was a period of general economic decline observed in world markets during the late 2000s and early 2010s. The scale and timing of the recession varied from country to country, in terms of overall impact, the International Monetary Fund concluded that it was the worst global recession since World War II. According to the US National Bureau of Economic Research the recession, as experienced in that country, began in December 2007 and ended in June 2009, the Great Recession was related to the financial crisis of 2007–08 and U. S. subprime mortgage crisis of 2007–09. The Great Recession has resulted in the scarcity of valuable assets in the market economy, under the academic definition, the recession ended in the United States in June or July 2009. In the broader, lay sense of the word however, many use the term to refer to ongoing hardship. The Great Recession met the IMF criteria for being a recession, requiring a decline in annual real world GDP per‑capita. According to the U. S.

National Bureau of Economic Research the recession began in December 2007 and ended in June 2009, the years leading up to the crisis were characterized by an exorbitant rise in asset prices and associated boom in economic demand. Further, the U. S. shadow banking system had grown to rival the depository system yet was not subject to the regulatory oversight. US mortgage-backed securities, which had risks that were hard to assess, were marketed around the world, the emergence of sub-prime loan losses in 2007 began the crisis and exposed other risky loans and over-inflated asset prices. With loan losses mounting and the fall of Lehman Brothers on 15 September 2008, the global recession that followed resulted in a sharp drop in international trade, rising unemployment and slumping commodity prices. Several economists predicted that recovery might not appear until 2011 and that the recession would be the worst since the Great Depression of the 1930s, Economist Paul Krugman once commented on this as seemingly the beginning of a second Great Depression.

Governments and central banks responded with fiscal and monetary policies to national economies. The recession has renewed interest in Keynesian economic ideas on how to combat recessionary conditions, economists advise that the stimulus should be withdrawn as soon as the economies recover enough to chart a path to sustainable growth. Income inequality in the United States has grown from 2005 to 2012 in more than 2 out of 3 metropolitan areas, median household wealth fell 35% in the US, from $106,591 to $68,839 between 2005 and 2011. The majority report of the U. S, Financial Crisis Inquiry Commission, composed of six Democratic and four Republican appointees, reported its findings in January 2011. There were two Republican dissenting FCIC reports, one of them, signed by three Republican appointees, concluded that there were multiple causes. He wrote, When the bubble began to deflate in mid-2007, There are several narratives attempting to place the causes of the recession into context, with overlapping elements.

Four such narratives include, There was the equivalent of a run on the shadow banking system

Frank did not seek re-election in 2012, and retired from Congress at the end of his term in January 2013. Frank had expressed interest in serving temporarily in the United States Senate after John Kerry had been confirmed as Secretary of State but was passed over for Mo Cowan. A biography of Frank was published in 2015, Frank was born Barnett Frank in Bayonne, New Jersey, one of four children of Elsie and Samuel Frank. His family was Jewish, and his grandparents had immigrated from Poland, Frank was educated at Harvard College, where he resided in Matthews Hall his first year and in Kirkland House and Winthrop House. One of his roommates was Hastings Wyman of Aiken, South Carolina, when Wyman invited Frank to visit Aiken in the early 1960s, Frank made a point of drinking from the since-abolished colored-only water fountain available to African Americans. Frank’s undergraduate studies were interrupted by the death of his father, in 1964, he was a volunteer in Mississippi during Freedom Summer.

The One Hundred Eleventh United States Congress was a meeting of the legislative branch of the United States federal government from January 3, 2009, until January 3, 2011. It began during the last two weeks of the George W. Bush administration, with the remainder spanning the first two years of …

The Democratic Party is one of the two major contemporary political parties in the United States, along with the Republican Party. Tracing its heritage back to Thomas Jefferson and James Madison's Democratic-Republican Party, the modern-day Democratic Party was founded around 1828 by supporters of …

Massachusetts, officially the Commonwealth of Massachusetts, is the most populous state in the New England region of the northeastern United States. It borders on the Atlantic Ocean to the east, the states of Connecticut and Rhode Island to the south, New Hampshire and Vermont to the …

Barack Hussein Obama II is an American attorney and politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, he was the first African American to be elected to the presidency. He previously served as a …

Obama posing in the Green Room of the White House with wife Michelle and daughters Sasha and Malia, 2009

The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the United States Constitution, the foundation of the federal government of the United States. The Constitution sets out the boundaries of federal law, which consists of Acts …

The President of the United States is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces. — In contemporary times, the president is …

The Consumer Financial Protection Bureau is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services …

Richard Joseph Durbin is an American politician serving as the senior United States Senator from Illinois, a seat he was first elected to in 1996. He has been the Senate Democratic Whip since 2005, the second-highest position in the Democratic leadership in the U.S. Senate …

The White House is the official residence and workplace of the President of the United States. It is located at 1600 Pennsylvania Avenue NW in Washington, D.C. and has been the residence of every U.S. President since John Adams in 1800. The term "White House" is often used as a metonym for the …

Top: the northern facade with a columned portico facing Lafayette Square Bottom: the southern facade with a semi-circular portico facing The Ellipse

The financial crisis of 2007–2008, also known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the most serious financial crisis since the Great Depression of the 1930s.It began in 2007 with a crisis in the subprime mortgage market in the …

Ben Shalom Bernanke is an American economist at the Brookings Institution who served two terms as Chair of the Federal Reserve, the central bank of the United States, from 2006 to 2014. During his tenure as chair, Bernanke oversaw the Federal Reserve's …

Barnett Frank is a former American politician. He served as a member of the U.S. House of Representatives from Massachusetts from 1981 to 2013. A Democrat, Frank served as chairman of the House Financial Services Committee and was a leading co-sponsor of the 2010 …

1981, Congressional Pictorial Directory – Frank's first term as Congressman

The Federal Deposit Insurance Corporation is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions. The FDIC was created by the 1933 Banking Act, enacted during the Great Depression to restore trust in the American …

The FDIC's satellite campus in Arlington, Virginia, is home to many administrative and support functions, though the most senior officials work at the main building in Washington

The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the monetary policy of the United States. Governors are …

Christopher John Dodd is an American lobbyist, lawyer, and Democratic Party politician who served as a United States Senator from Connecticut for a thirty-year period from 1981 to 2011. — Dodd is a Connecticut native and a graduate of Georgetown Preparatory School in Bethesda …

The Great Recession was a period of general economic decline observed in world markets during the late 2000s and early 2010s. The scale and timing of the recession varied from country to country. The International Monetary Fund concluded that the overall impact was the most severe since the Great …

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying." Derivatives can be used for a number of purposes, including insuring against …

The United States House of Representatives is the lower chamber of the United States Congress, the Senate being the upper chamber. Together they comprise the legislature of the United States. — The composition of the House is established by Article One of the United States Constitution. The House is …

An Act of Congress is a statute enacted by the United States Congress. It can either be a Public Law, relating to the general public, or a Private Law, relating to specific institutions or individuals. — The term can be used in other countries with a legislature named "Congress", such as the Congress …

The United States Statutes at Large, commonly referred to as the Statutes at Large and abbreviated Stat. are an official record of Acts of Congress and concurrent resolutions passed by the United States Congress. Each act and resolution of Congress is originally published as a slip law, which is …

The United States House Committee on Financial Services, also referred to as the House Banking Committee and formerly known as the Committee on Banking and Currency, is the committee of the United States House of Representatives that oversees the entire financial services industry, including the …

In regulatory jurisdictions that provide for it, consumer protection is a group of laws and organizations designed to ensure the rights of consumers as well as fair trade, competition and accurate information in the …

Consumer protection laws often mandate the posting of notices, such as this one which appears in all automotive repair shops in California

An exchange, or bourse also known as a trading exchange or trading venue, is an organized market where tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought. — History — The term bourse is related to the 13th-century inn named "Huis …

The Volcker Rule refers to § 619 of the Dodd–Frank Wall Street Reform and Consumer Protection Act. The rule was originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of …

The Glass–Steagall legislation describes four provisions of the United States Banking Act of 1933 separating commercial and investment banking. The article 1933 Banking Act describes the entire law, including the legislative history of the provisions covered here. — As for the Glass–Steagall Act of …

A committee is a body of one or more persons that is subordinate to a deliberative assembly. Usually, the assembly sends matters into a committee as a way to explore them more fully than would be possible if the assembly itself were considering them. Committees may have different …

Interchange fee is a term used in the payment card industry to describe a fee paid between banks for the acceptance of card-based transactions. Usually for sales/services transactions it is a fee that a merchant's bank pays a customer's bank; and for cash …

Terminals for swiping credit cards, and origin of the term "swipe fee"

The Holy Crown of Hungary, also known as the Crown of Saint Stephen, was the coronation crown used by the Kingdom of Hungary for most of its existence; kings have been crowned with it since the twelfth century. — The Crown was bound to the Lands of the Hungarian Crown …

The Holy Crown

Back of the Holy Crown

The crown depicted in the 15th-century Fugger Chronicle. All images of the crown before the mid-17th century show the cross in its original upright position.

Sir Thomas Sean Connery is a retired Scottish actor and producer, who has won an Academy Award, two BAFTA Awards, one of them being a BAFTA Academy Fellowship Award and three Golden Globes, including the Cecil B. DeMille Award and a Henrietta Award. — Connery was the first actor …

The Huntington Library, Art Collections and Botanical Gardens, colloquially known as The Huntington, is a collections-based educational and research institution established by Henry E. Huntington and located in San Marino, California, United States. In addition to the library, the …

The Distinguished Order of the Golden Fleece is a Roman Catholic order of chivalry founded in Bruges by the Burgundian duke Philip the Good in 1430, to celebrate his marriage to the Portuguese princess Isabella …

Insignia of a Knight of the Order of the Golden Fleece of Spain. Modern manufacture, Cejalvo (Madrid).

The Greco-Bactrian Kingdom was – along with the Indo-Greek Kingdom – the easternmost part of the Hellenistic world, covering Bactria and Sogdiana in Central Asia from 250 to 125 BC. It was centered on the north of present-day Afghanistan. The expansion of the Greco-Bactrians into present-day …

The Punic Wars were a series of three wars fought between Rome and Carthage from 264 BC to 146 BC. At the time, they were some of the largest wars that had ever taken place. The term Punic comes from the Latin word Punicus, meaning "Carthaginian", with reference to the Carthaginians' …

Depiction of Hannibal and his army crossing the Alps during the Second Punic War

The Black Swan Project is the project name given by Odyssey Marine Exploration for its discovery and recovery of an estimated US$500 million worth of silver and gold coins from the ocean floor. Initially Odyssey kept the origin of the treasure confidential. It was later proved in …

Sample of coins from the Mercedes treasure displayed at a Spanish museum in 2015.